Yes. Huge proportion of performance shares and in my opinion they have very low hurdles to achieve.
Eg. $10m recurring revenue in 3 years would be a massive undershoot of the forecast revenue provided in the Sophisticated Investor valuation.
That forecast shows 12 month trailing revenue of $32 million in 3 years.
“Recurring revenue” used to measure the performance milestones can be much higher than reported revenue when there is high growth. SI forecast is showing CAGR of 100%.
Recurring revenue can also be gamed with contract timings.
This milestone would mean that they are reporting significantly less than $10m actual revenue in FY20. This would be a major disappointment on present expectations. If this outcome transpired then in my opinion the market cap would be a fraction of what it is today. And to compound matters there would be a lot more shares on issue.
I’m not saying that this is a likely outcome but just trying to demonstrate why I think the performance hurdles are low.
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